MEADOW VALLEY CORPORATION
INCENTIVE STOCK OPTION AGREEMENT
UNDER THE 1994 STOCK OPTION PLAN
Between:
Meadow Valley Corporation (the "Company") and (the "Employee"), dated
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The Company hereby grants to the Employee an option (the "Option") to
purchase _________ shares of the Company's $.001 par value common stock
("Stock") under the Meadow Valley Corporation 1994 Stock Option Plan (the
"Plan") upon the following terms and conditions:
1. Purchase Price. The purchase price of the Stock shall be _____ per
share, which is not less than the fair market value of the Stock on the date of
this Agreement.
2. Incentive Stock Option. The Option shall be an Incentive Stock Option,
as defined in the Plan.
3. Period of Exercise. The Option will expire ten years from the date of
this Agreement. The Option may be exercised only while the Employee is actively
employed by the Company and as provided in Section 6, dealing with termination
of employment.
The Option may be exercised for up to, but not in excess of, the amounts of
shares subject to the Option specified below, based on the Employee's number of
years of continuous employment with the Company from the date hereof. In
applying the following limitations, the amount of shares, if any, previously
purchased by Employee shall be counted in determining the amount of shares the
Employee can purchase at any time in accordance with said limitations. The
Employee may exercise the Option in the following amounts and in accordance with
the conditions set forth in paragraph 7.3 of the Plan:
(i) After one (1) year of continuous services to the
Company, the Employee may purchase up to 33.3% of the shares
of Stock subject to the Option;
(ii) After two (2) years of continuous services to the
Company, the Employee may purchase up to 66.6% of the shares
of Stock subject to the Option;
(iii) After three years of continuous services to the
Company, the Employee may purchase all shares of Stock
subject to the Option.
This Option may not be exercised for less than fifty shares at any time
unless the number of shares purchased is the total number purchasable at the
time under the Option.
Where the Employee holds (whether under this Option alone or under this
Option in conjunction with other incentive stock options) incentive stock
options upon shares of the Company's common stock having an aggregate fair
market value (determined at the time of grant of each option) exceeding
$100,000, the $100,000 Limitation set forth in Section 4 below may impose
additional limitations upon the exercisability of this Option and any other
incentive stock options granted to the Employee. Such limitations are in
addition to, and not in lieu of, the limitations set forth in this Section 3.
4. $100.000 Limitation. Notwithstanding anything to the contrary contained
herein, the total fair market value (determined as of the date of grant of an
option) of shares of stock with respect to which this Option (and any other
incentive stock options granted by the Company) shall become exercisable for the
first time during any calendar year shall not exceed $100,000. (Hereinafter this
limitation is sometimes referred to as the "$100,000 Limitation.") If in any
calendar year shares of stock having a fair market value of more than $100,000
first would become exercisable, but for the limitations of this section, this
Option shall be exercisable in such calendar year only for shares having a fair
market value not exceeding $100,000. (Hereinafter, shares with respect to which
this Option is not exercisable in a calendar year due to the $100,000 Limitation
are referred to as "Excess Shares.")
This Option shall become exercisable with respect to Excess Shares from a
calendar year in the next succeeding calendar year (subject to any other
restrictions on exercise which may be contained herein), provided that the
$100,000 limitation shall also be applied to such succeeding calendar year.
Subject to the term of this Option, such carryovers of Excess Shares shall be
made to succeeding calendar years, including carryovers of any Excess Shares
from previous calendar years, without limitation.
If as of the date of this Agreement the Employee already holds incentive
stock options granted by the Company (hereinafter any such incentive stock
options are referred to as "Prior Options"), and the fair market value
(determined as the date of grant of each option) of the shares subject to this
Option and the Prior Options held by the Employee is such that the $100,000
Limitation must be imposed, the $100,000 Limitation shall be applied as follows
unless a special provision is made on Exhibit A attached hereto. If no special
provision is made on Exhibit A, the $100,000 Limitation shall be applied by
giving priority to options which first become exercisable during a calendar year
under the Prior Options. Thus, in applying the $100,000 Limitation under this
Option, the fair market value (determined as of the date of grant) of the shares
of stock with respect to which options first become exercisable under the Prior
Options during the calendar year shall first be determined. Only the balance
remaining for the calendar year of the $100,000 Limitation, if any, may be
exercisable under this Option for the calendar year, with any excess to be
carried over as provided in the preceding paragraph, but with such carryover
also to be subject to the provisions of this paragraph.
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Employee acknowledges that it is possible that he or she may be granted
incentive stock options by the Company after the date of this Agreement.
(Hereinafter such options are referred to as "Subsequent Options.") If the
exercise price of a Subsequent Option is less than the exercise price of this
Option, and if permitted under the regulations and decisions applicable to the
$100,000 Limitation, Employee agrees that the Company may reduce the number of
shares of stock for which this Option is exercisable in specified calendar
years, so that all or part of the $100,000 limitation for said calendar years
may be applied to such Subsequent Option, permitting earlier exercise of such
Subsequent Option than would otherwise be possible. Where such reductions are
made, Employee agrees to enter into any appropriate documentation to implement
such reductions.
Employee further acknowledges that, as provided in the Plan, in certain
circumstances connected with a dissolution or liquidation of the Company, or a
merger, consolidation or other form of reorganization in which the Company is
not the surviving corporation, the imposition of the $100,000 Limitation may
result in the termination of all or part of this Option or other incentive stock
options.
5. Transferability. This Option is not transferable except by will or the
laws of descent and distribution and may be exercised during the lifetime of the
Employee only by him or her.
6. Termination of Employment. In the event that employment of the Employee
with the Company is terminated, the Option may be exercised (to the extent
exercisable at the date of his termination) by the Employee within three months
after the date of termination; provided, however, that:
(a) If the Employee's employment is terminated because he is
disabled within the meaning of Internal Revenue Code section
422A, the Employee shall have one year rather than three
months to exercise the Option (to the extent exercisable at
the date of his termination).
(b) If the Employee dies, the Option may be exercised (to
the extent exercisable by the Employee at the date of his
death) by his legal representative or by a person who
acquired the right to exercise such option by bequest or
inheritance or by reason of the death of the Employee, but
the Option must be exercised within one year after the date
of the Employee's death.
(c) If the Employee's employment is terminated for cause,
this Option shall terminate immediately.
(d) In no event (including death of the Employee) may this
Option be exercised more than ten years from the date
hereof.
7. No Guarantee of Employment. This Agreement shall in no way restrict the
right of the Company to terminate Employee's employment at any time.
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8. Investment Representation: Legend. The Employee (and any other purchaser
under paragraphs 6(a) or 6(1,) hereof) represents and agrees that all shares of
Stock purchased by him under this Agreement will be purchased for investment
purposes only and not with a view to distribution or resale. The Company may
require that an appropriate legend be inscribed on the face of any certificate
issued under this Agreement, indicating that transfer of the Stock is
restricted, and may place an appropriate stop transfer order with the Company's
transfer agent with respect to the Stock.
9. Method of Exercise. The Option may be exercised, subject to the terms
and conditions of this Agreement, by written notice to the Company. The notice
shall be in the form attached to this Agreement and will be accompanied by
payment (in such form as the Company may specify) of the full purchase price of
the Stock to be issued, and in the event of an exercise under the terms of
paragraphs 6(a) or 6(1,) hereof, appropriate proof of the right to exercise the
Option. The Company will issue and deliver certificates representing the number
of shares purchased under the Option, registered in the name of the Employee (or
other purchaser under paragraph 6 hereof) as soon as practicable after receipt
of the notice.
10. Withholding. In any case where withholding is required or advisable
under federal, state or local law in connection with any exercise by Employee
hereunder, the Company is authorized to withhold appropriate amounts from
amounts payable to Employee, or may require Employee to remit to the Company an
amount equal to such appropriate amounts.
11. Incorporation of Plan. This Agreement is made pursuant to the
provisions of the Plan, which Plan is incorporated by reference herein. Terms
used herein shall have the meaning employed in the Plan, unless the context
clearly requires otherwise. In the event of a conflict between the provisions of
the Plan and the provisions of this Agreement, the provisions of the Plan shall
govern.
MEADOW VALLEY CORPORATION
By
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President
ACCEPTED:
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Employee
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MEADOW VALLEY CORPORATION
NOTICE OF EXERCISE OF STOCK OPTION ISSUED
UNDER THE 1994 STOCK OPTION PLAN
To: Compensation Committee
Meadow Valley Corporation
0000 X. 00xx Xxxxxx, Xxxxx X-00
Xxxxxxx, XX 00000
I hereby exercise my Option dated __________ to purchase __________ shares
of $.001 par value common stock of the Company at the option exercise price of
$_____ per share. Enclosed is a certified or cashier's check in the total amount
of $_____, or payment in such other form as the Company has specified.
I represent to you that I am acquiring said shares for investment purposes
and not with a view to any distribution thereof. I understand that my stock
certificate may bear an appropriate legend restricting the transfer of my shares
and that a stock transfer order may be placed with the Company's transfer agent
with respect to such shares.
I request that my shares be issued in my name as follows:
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Print your name in the form in which you
wish to have the shares registered)
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(Social Security Number)
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(Street and Number)
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(City) (State) (Zip Code)
Dated: 19
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Signature:
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